Economy

Brazil's beefed up 'Bolsa Familia' welfare program to be less than BRL 300 reais a month - sources

The beefed up Bolsa Familia will replace the current emergency aid program implemented to counter the effects of the pandemic and which expires later this year

Photo: REUTERS/Amanda Perobelli
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  • The revamped nationwide program is expected to come into effect in December this year or early next year;
  • Average payments are certain to be increased from the current BRL 190 a month.

Brazil‘s new “Bolsa Familia” welfare payments to the poor will average below BRL 300 ($59.50) a month, sources familiar with the discussions said on Monday, less than the figure President Jair Bolsonaro had indicated last week.

The revamped nationwide program is expected to come into effect in December this year or early next year, and average payments are certain to be increased from the current BRL 190 a month.

But with the Economy Ministry keen to keep control of the public finances and make sure its spending cap rule is not broken, the stipends are likely to be less than the BRL 300 a month Bolsonaro flagged recently.

READ ALSO: Brazil government sees a 4.7% drop for 2020 GDP and backs off from creating a broader cash transfer program

“The challenge is to find the resources without piercing the (spending) ceiling,” one source told Reuters on condition of anonymity. “Every real here or there makes a huge difference in the final bill.”

Bolsonaro, whose popularity has plummeted during the coronavirus crisis and is preparing for re-election in October 2022, has said the program will be expanded. Economy Ministry officials had previously indicated that stipends could be raised to BRL 250 a month.

A second source said payments could be between BRL 250 and BRL 284 a month, and that the number of eligible people could increase to around 17 million from 14.6 million currently.

The beefed up Bolsa Familia will replace the current emergency aid program implemented to counter the effects of the pandemic and which expires later this year.

READ ALSO: Why emergency basic income programs are so necessary in Latin America

President Bolsonaro said that the government would no longer create the Renda Brasil, a broader cash transfer program, and it will continue only with Bolsa Família.

Amid the pandemic, Brazilians pressured for a more comprehensive minimum income program, as the Rio de Janeiro-based think thank FGV estimes that 12.8% of Brazil’s population — some 27 million people — are now living below the poverty line of BRL 246 a month, the most since the series began a decade ago.

The Economy Ministry did not comment on the Bolsa Familia issue, while the Ministry of Citizenship said in a statement the new figures were still being discussed.

Economists at Barclays calculate that current inflation of 8% gives the government more leeway to increase public spending next year without breaching the spending cap, perhaps as much as BRL 124 billion ($25 billion) extra.

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